due to account abuse, they need to give them adverse action notice right?
That would depend on the nature of the abuse. Look at Reg. B 1002.2(c) for what is and what is not adverse action.
Sounds like you are turning the account into closed-end credit and need to give them closed-end disclosures.
I'm not sure I agree with this unless I'm missing something. They are not converting (modifying) the account to closed-end credit. They are just terminating the borrower's credit availability due to the mishandling of the account and allowing the borrower to pay out under the existing terms.
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The opinions expressed are mine and they are not to be taken as legal advice.